Once considered the leader in China’s auto industry, Volkswagen has watched its share of the pie shrink over the past year or so as EV makers like BYD, NIO, and Tesla steal the show. In an attempt to draw in buyers, VW is slashing the price of its small ID.3 electric car.
For a limited time, VW will offer the ID.3 at a “historical low price,” starting as low as 125,900 yuan (roughly $17,500).
The ID.3 was the first of Volkswagen’s all-electric “ID” model lineup that now includes the ID.4, ID.5, ID.6 (only in China), ID.7, and the ID.Buzz electric van.
After ending production of the e-Golf in 2019, the ID.3 set VW on a new path hitting the market in July 2020 as one of the most anticipated EVs of the year. The compact ID.3 electric car quickly climbed the sales charts to become a top-selling EV in Europe before arriving in China in late 2021.
Since arriving in China through SAIC-Volkswagen, the automaker has sold over 130,000 units, among the top joint venture EV sales.
However, it hasn’t been enough to hold onto its lead. At Volkswagen’s general meeting in May, shareholders were quick to bring up rising competition from EV makers in the region like BYD and Tesla.
China’s auto market is rapidly progressing toward EVs, with one in every four vehicles sold in the region last year being electric.
Volkswagen fell behind China’s BYD in passenger car sales during the first quarter, with demand for low-priced EVs on the rise.
VW drops ID.3 price fin China for a limited-time
To keep up with the competition and stimulate demand, SAIC-Volkswagen announced Friday it’s launching a limited-time offer on the ID.3.
From now until July 31, 2023, buyers in China can purchase the VW ID.3 electric car for a starting price of 125,900 yuan (around $17,500).
The ID.3, VW’s smallest EV, is built at SAIC-Volkswagen’s new energy factory in Shanghai. Based on VW’s MEB platform, the ID.3 offers up to 450 km (279 miles) CLTC of range from a 57.3 kWh lithium-ion battery pack. A rear electric motor provides up to 170 hp and 310 Nm peak torque.
SAIC-Volkswagen also unveiled a new electric sedan concept, the ID.Next, at the 2023 Auto Show, the automaker’s version of the global ID.7, released in April.
To avoid further price wars in China, Volkswagen’s other joint venture in China, VW-FAW, was one of over a dozen automakers that recently helped facilitate a pledge to maintain fair competition and pricing in the region.
City Dwellers’s Take
Volkswagen is facing stiff competition in China, with low-cost rival BYD and EV pioneer Tesla gaining market share.
The automaker’s overall sales fell 3.6% last year and have continued into 2023. Volkswagen sold just over 11,300 EVs in China in May, accounting for 2.9% of the market, down from 3.2% last year.
The ID.3 has had a hard time keeping up with rivals like the BYD Dolphin, with a starting price of 116,800 yuan ($16,100) and the Yuan Plus, starting at 134,000 yuan ($18,500).
The new offer puts the ID.3 at a competitive price, but will Volkswagen still be able to compete with BYD? The automaker sold nearly 30K Dolphin EVs in May, roughly 11 times the ID.3. Likewise, the Yuan Plus had over 26K sales in May.
Volkswagen is pledging to work with its local partners to win back market share with EVs designed for Chinese buyers. We’ll see if the offer can stimulate demand. If so, I would expect more offers to come.
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